The Bush administration is seriously considering "orderly" bankruptcy as a way of dealing with the desperately ailing U.S. auto industry.

White House press secretary Dana Perino said Thursday, "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about."

President George W. Bush, asked about an auto rescue plan during an appearance before a private group, said he hadn't decided what he would do.

But he, like Perino, spoke of the idea of bankruptcies organized by the federal government as a possible way to go.

"Under normal circumstances, no question bankruptcy court is the best way to work through credit and debt and restructuring," he said. "These aren't normal circumstances. That's the problem."

At the White House, Perino said, "The president is not going to allow a disorderly collapse of the companies. A disorderly collapse would be something very chaotic that is a shock to the system."

She said the White House was close to a decision and emphasized there were still several possible approaches to assisting the automakers, such as short-term loans out of a $700 billion Wall Street rescue fund. Bush has resisted this approach before, and it is adamantly opposed by many Republicans.

Midday Glance: Internet companies

Shares of some top internet companies are mixed at noon:

Akamai Technologies (nasdaq: AKAM - news - people ) fell $.40 or 2.5 percent, to $15.66.

Amazon rose $1.10 or 2.1 percent, to $54.28.

eBay (nasdaq: EBAY - news - people ) fell $.04 or .3 percent, to $14.98.

Google (nasdaq: GOOG - news - people ) rose $4.05 or 1.3 percent, to $319.29.

Yahoo (nasdaq: YHOO - news - people ) rose $.13 or 1.0 percent, to $13.24.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

FedEx Corp. said Thursday its fiscal second-quarter earnings rose 3 percent, narrowly topping Wall Street's expectations, but it announced further cost cuts as demand continues to slump.

Chief Executive Frederick W. Smith said the company's earnings are "increasingly being challenged by some of the worst economic conditions in the company's 35-year operating history."

The Memphis, Tenn.-based company earned $493 million, or $1.58 per share, compared with a year-ago profit of $479 million, or $1.54 per share. Revenue rose 1 percent to $9.54 billion.

Analysts polled by Thomson Reuters predicted a profit of $1.57 per share on revenue of $9.87 billion.

The package delivery company said it will implement pay cuts for senior executives and a 1-year freeze on 401(k) contributions. On Jan. 1, CEO Smith will take a 20 percent pay cut, and other top brass will take a reduction in pay between 7.5 percent and 10 percent.

FedEx (nyse: FDX - news - people ) will also implement a 5 percent pay cut for all remaining U.S. "salaried exempt" personnel.

Combined, the company expects these measures to save $200 million through the remainder of the fiscal year ending in May and $600 million in the next fiscal year.

Fitch Ratings said Thursday it has placed Charter Communications Inc.'s "CCC" issuer default rating on negative rating watch, after the cable operator said it will begin discussions with its bondholders about financial options to improve its balance sheet.

Fitch said the rating watch reflects its concern that the start of those discussions increases the likelihood that the company will engage in a broad-based distressed debt exchange or file for bankruptcy.

About $21.1 billion of the company's outstanding debt as of Sept. 30 is affected.

A "CCC" rating is non-investment grade, also known as "junk."

Charter, a St. Louis-based cable TV operator controlled by Microsoft Corp. (nasdaq: MSFT - news - people ) co-founder Paul Allen, reported interest costs of $478 million for the third quarter compared with operating income of $208 million. Allen no longer works for Microsoft.

Charter's shares were trading at 13 cents apiece Thursday afternoon.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

The multibillion-dollar Madoff mess proves one thing: Even the most sophisticated of investors are susceptible to fraud. It also proves that relying on highly paid financial advisers or the Securities and Exchange Commission won't protect you from getting ripped off.

Madoff's alleged $50 billion Ponzi scheme had the appearance of being a legitimate operation. Until recently, Madoff was paying dividends, sending out monthly statements and fulfilling withdrawal requests. It wasn't until early December when he admitted to having requests from clients for approximately $7 billion in redemptions that the Ponzi scheme started to collapse. Madoff simply didn't have the funds to meet those obligations. The jig was up.

In the case of Madoff, investors turned a blind eye to due diligence that could have been done. "Sometimes the bigger someone is, the less vetting people do," says fraud expert S. Gregory Hays, managing principal, Hays Financial Consulting. "Investors sometimes assume that someone else did their homework." And in the case of Madoff's scheme, the multitude of seemingly sophisticated investors and accomplished business people--from Mortimer Zuckerman to HSBC (nyse: HBC - news - people ) and Groupo Santander--no doubt lent credibility as Madoff expanded his ponzi.

For most investors the best way to keep a Ponzi out of your portfolio is to follow the common sense rule of "if something sounds too good to be true, it probably is." It also is best to ask lots of questions and beware of any potential investment or adviser that is overly secretive in terms of explaining investment strategy.

In Pictures: 10 Fraud Red Flags

In the case of Madoff, it was difficult to rely on publicly available information to discover that a fraud might have been taking place, since little was available. "There were no lawsuits or claims that he was defrauding people," says Kenneth S. Springer, former special agent of the Federal Bureau of Investigation who is now a certified fraud examiner and president and founder of New York-based Corporate Resolutions.

The one red flag that might have raised suspicions was the fact that Madoff used a tiny accounting firm in New City, N.Y., Friehling &

Of course the best way to discover a sophisticated scheme would be to hire someone to do on-site financial due diligence. Sometimes, large, institutional investors are even allowed to do surprise audits. "You would want to look at the trading and see what kind of transparency was there to see where the money was really being invested, too," says Springer. "Had people done that, many wouldn't have been satisfied with what they would have found out, and they would have walked away." Investors could have also hired an investigator to examine and interview the prime broker and administrators, he adds.

Special Offer: Larry Kudlow teases Gary Shilling about being bearish, but Gary was right! The housing market crashed, banks went under, and now it's bailout time. Think the problems have passed? Think again, before you invest. Click here for advice to keep your wealth with Gary Shilling's Insight.

Wall Street struggled to find direction Thursday morning as mixed reports from the economy and the corporate sector had the market wobbling.

With the holiday week fast-approaching, volumes were light and investors appeared to shy away from aggressive moves in the equity markets, but there was plenty of action in commodities, currencies and government debt.

The Labor Department kicked off the day, reporting that initial jobless claims inched down to 554,000 last week, from 575,000 the week before. Meanwhile, continuing claims edged back below 4.4 million. The decline was positive news, but the hits keep coming; health insurance outfit Aetna (nyse: AET - news - people ) said it will cut its workforce by 1,000 jobs. (See "December 2008 Layoffs.")

A closely-watched reading on manufacturing activity was not as bad as feared; the Philadelphia Fed index came in at negative 32.9 for December. The figure indicates regional activity in the sector slowed less than expected, following a negative 39.3 reading in November.

Major indexes were little changed by midday, as the Dow was down 10 points, or 0.1%, to 8,814; the S&P 500 was up 2 points, or 0.3%, to 907; and the Nasdaq gained 3 points, or 0.2%, to 1,582. There was more action in other markets during the seesaw session though.

Traders scoffed at Wednesday's production cut of 2.2 million barrels of oil a day by the Organization of Petroleum Exporting Countries, sending crude down $1.98, to $38.08 a barrel. United States Oil Fund (nyse: USO - news - people ), an exchange-traded vehicle that seeks to mirror the movement of crude and other products, lost $1.64, or 4.7%, to $33.17. (See "Russia Dashes OPEC's Hopes.")

Treasury yields and the dollar continued to soften, after the Federal Reserve slashed its benchmark fed funds rate effectively to zero on Tuesday. The 10-year note's yield was down to 2.10%, from 2.20% Wednesday. The iShares Lehman 10-20 Year Treasury Bond Fund (nyse: TLH - news - people ), which tracks longer maturities, was up $1.92, or 1.6%, to $123.80. The euro sustained recent strength early, trading over $1.44 Thursday morning, but shed its gain and fell back to $1.429 by midday. (See "Helicopter Ben Goes ZIRP!")

Wall Street struggled to find direction Thursday morning as mixed reports from the economy and the corporate sector had the market wobbling.

With the holiday week fast-approaching, volumes were light and investors appeared to shy away from aggressive moves in the equity markets, but there was plenty of action in commodities, currencies and government debt.

The Labor Department kicked off the day, reporting that initial jobless claims inched down to 554,000 last week, from 575,000 the week before. Meanwhile, continuing claims edged back below 4.4 million. The decline was positive news, but the hits keep coming; health insurance outfit Aetna (nyse: AET - news - people ) said it will cut its workforce by 1,000 jobs. (See "December 2008 Layoffs.")

A closely-watched reading on manufacturing activity was not as bad as feared; the Philadelphia Fed index came in at negative 32.9 for December. The figure indicates regional activity in the sector slowed less than expected, following a negative 39.3 reading in November.

Major indexes were little changed by midday, as the Dow was down 10 points, or 0.1%, to 8,814; the S&P 500 was up 2 points, or 0.3%, to 907; and the Nasdaq gained 3 points, or 0.2%, to 1,582. There was more action in other markets during the seesaw session though.

Traders scoffed at Wednesday's production cut of 2.2 million barrels of oil a day by the Organization of Petroleum Exporting Countries, sending crude down $1.98, to $38.08 a barrel. United States Oil Fund (nyse: USO - news - people ), an exchange-traded vehicle that seeks to mirror the movement of crude and other products, lost $1.64, or 4.7%, to $33.17. (See "Russia Dashes OPEC's Hopes.")

Treasury yields and the dollar continued to soften, after the Federal Reserve slashed its benchmark fed funds rate effectively to zero on Tuesday. The 10-year note's yield was down to 2.10%, from 2.20% Wednesday. The iShares Lehman 10-20 Year Treasury Bond Fund (nyse: TLH - news - people ), which tracks longer maturities, was up $1.92, or 1.6%, to $123.80. The euro sustained recent strength early, trading over $1.44 Thursday morning, but shed its gain and fell back to $1.429 by midday. (See "Helicopter Ben Goes ZIRP!")

There Are Too Many Car Companies Anyway

Even without Big Three bankruptcies, the industry badly needs consolidation.

Fitch puts Charter on rating watch over debt woes

Fitch Ratings said Thursday it has placed Charter Communications Inc.'s "CCC" issuer default rating on negative rating watch, after the cable operator said it will begin discussions with its bondholders about financial options to improve its balance sheet.

Fitch said the rating watch reflects its concern that the start of those discussions increases the likelihood that the company will engage in a broad-based distressed debt exchange or file for bankruptcy.

About $21.1 billion of the company's outstanding debt as of Sept. 30 is affected.

A "CCC" rating is non-investment grade, also known as "junk."

Charter, a St. Louis-based cable TV operator controlled by Microsoft Corp. (nasdaq: MSFT - news - people ) co-founder Paul Allen, reported interest costs of $478 million for the third quarter compared with operating income of $208 million. Allen no longer works for Microsoft.

Charter's shares were trading at 13 cents apiece Thursday afternoon.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

They stand in line outside stores waiting for midnight launches of new video games. When they get home after a long day, they plop down in front of the TV not to sit back and watch, but to play.

They're known as "core gamers." They are people like Greg Wilcox, who writes about video games and has bought roughly 100 this year, and people like Mark Hengst, who's in law enforcement and says daily gaming gives him an "interactive form of escapism." And there's Wyatt Du Frane, a geology graduate student who's been playing since he was a little boy.

"I like their scope," said Du Frane, 28, a student at Arizona State University. "A movie is only a couple of hours. A video game is more like a book or a TV series, where you can kind of continue the story."

For the video game industry, core gamers are proving crucial. Their willingness to regularly, loyally buy new titles - no matter what - gives the industry a better chance of success than other businesses that rely on discretionary spending vulnerable to the recession.

"As long as hard-core gamers have a job, they will continue to buy games," said IDC video games analyst Billy Pidgeon.

The industry's ability to lean on core gamers is a bit of a twist, because video game makers have been working hard to grow by expanding their mainstream appeal.

Families and people who haven't picked up a game controller in ages, or ever, have flocked to the easy-to-master Nintendo (other-otc: NTDOY.PK - news - people ) Wii since its 2006 launch. Taking note, Sony Corp. (nyse: SNE - news - people ) and Microsoft Corp. (nasdaq: MSFT - news - people ) have been expanding what their game consoles offer, adding movies and TV shows, to attract people whose idea of the perfect Sunday afternoon doesn't involve shooting aliens. Software publishers like Ubisoft Entertainment, Activision Blizzard (nasdaq: ATVI - news - people ) Inc. and Electronic Arts Inc. (nasdaq: ERTS - news - people ) have boosted their titles aimed at young girls, families and women over 35, who have helped push game sales higher.